Ventas, Inc. Reports 7.5% Increase in Net Operating Income for 2024

Ventas, Inc., a real estate investment trust (REIT) focused on the healthcare sector, reported strong financial performance for the year ended December 31, 2024. Total net operating income (NOI) reached $2.07 billion, a 7.5% increase compared to $1.93 billion in 2023. This growth was driven primarily by increases in NOI within the senior housing operating portfolio (SHOP) segment, which saw a 21.8% increase to $866.4 million, and the triple-net leased properties (NNN) segment, which increased by 0.3% to $606.2 million. Net income attributable to common stockholders was $81.15 million, a significant improvement from a net loss of $40.97 million in 2023.

Significant changes compared to the previous year included a $155 million increase in SHOP segment NOI, primarily due to higher occupancy and revenue per occupied room, acquisitions, and segment conversions. The OM&R segment experienced a modest 0.4% increase in NOI to $579.3 million, primarily due to acquisitions and favorable leasing activity. The NNN segment's NOI increase was less pronounced, at 0.3%, primarily due to contractual rent escalators offset by segment conversions and dispositions. Non-segment NOI decreased by 46.5% to $17.2 million, mainly due to a decrease in interest income. The company also made $2 billion in investments, including senior housing communities and LTACs, and sold properties for $315.1 million, resulting in a $57 million gain on real estate dispositions.

Strategic developments during the year included the acquisition of 50 senior housing communities and five LTACs, as well as the conversion of 11 senior housing communities from the NNN to the SHOP segment. The company also entered into agreements with Kindred Healthcare and Brookdale Senior Living to extend lease terms and acquire additional properties. Furthermore, Ardent Health Partners completed an initial public offering, resulting in a decrease in Ventas' equity stake and a corresponding gain. The company also repaid significant amounts of senior notes throughout the year.

Key operational developments included an average unit occupancy of 84.5% in the SHOP segment and 88.3% occupancy in the OM&R segment. Average monthly revenue per occupied room in the SHOP segment increased to $4,923. In the NNN segment, average occupancy rates for senior housing communities, SNFs, and IRFs/LTACs were 78.7%, 84.7%, and 54.8%, respectively, for the trailing 12 months ended September 30, 2024. The company employed 498 people as of December 31, 2024.

Ventas' outlook for 2025 anticipates strong supply/demand fundamentals in senior housing, driven by robust projected demand growth and low projected supply growth. The company expects continued impact from macroeconomic conditions, including inflation and unemployment, on operating expenses. The company also highlighted its liquidity position of $3.8 billion as of December 31, 2024, and its ongoing "at-the-market" equity offering program with $1.5 billion remaining.